Gold was steady after rising Tuesday on concerns over central bank independence and inflation risks after President Donald Trump doubled down on his efforts to oust Federal Reserve Governor Lisa Cook https://t.co/HHTe7mZzDu ...

Federal Reserve Governance & Influence - The President's potential ousting of Governor Cook could create another vacancy on the Fed board, allowing for another presidential appointment [1] - Currently, there are two Republican appointees on the seven-member Fed board, with a third nomination pending [1] - If another governor steps down, the President could potentially secure a majority (four out of seven) on the Fed board [2] - A majority on the Fed board could potentially support the President's push for lower interest rates [2] Regional Bank Oversight - The Fed board has the authority to reauthorize the 12 regional bank presidents every 5 years [4] - The administration might consider exerting pressure on regional bank presidents through board members aligned with their views, particularly regarding interest rate policies [4] - This scenario is hypothetical but is being considered by administration officials [5]

US stocks shuffled between small gains and losses on Tuesday, pressured by a rise in bond yields as President Donald Trump’s decision to fire a Federal Reserve governor revived concerns about the central bank’s independence https://t.co/rYZ2rdHLhg ...

Core Viewpoint - The pressure from Trump on the Federal Reserve has intensified during the Jackson Hole global central bank conference, highlighting the challenging outlook for the world's most important central bank [1][2]. Group 1: Pressure on the Federal Reserve - Trump's pressure has shifted from primarily targeting Fed Chair Powell to directly threatening Fed Board member Lisa Cook, indicating a more aggressive stance [2]. - Trump has publicly stated that he would fire Cook if she does not resign over mortgage fraud allegations, showcasing a direct challenge to the Fed's independence [2][3]. - The atmosphere at the conference was tense, with increased security measures in place, reflecting the heightened stakes of the ongoing political pressure on the Fed [1]. Group 2: Potential Changes in Fed Structure - Trump has appointed two members to the seven-member Fed Board, and if he secures two more nominations, he could gain a majority, fundamentally reshaping the Fed's structure [2][3]. - A significant goal for Trump could be to weaken the 12 regional Federal Reserve Banks by potentially refusing to reappoint their presidents, which would break a long-standing precedent and undermine the Fed's independence established since its inception in 1913 [3][4]. - The regional Fed presidents are selected by local committees, and their terms coincide with the Fed Board's decisions, making this a critical area for potential influence [3]. Group 3: Historical Context and Implications - Historical lessons from the 1970s indicate that political pressure on the Fed can lead to policy mistakes, resulting in severe economic consequences such as stagflation [4]. - If investors lose confidence in the Fed's ability to make data-driven decisions free from political influence, it could erode the financial markets' historical rewards for central bank independence, such as lower borrowing costs and stable currency value [4].

Monetary Policy & Fed Credibility - The Fed's credibility is at risk if political pressure influences rate cuts, potentially clouding public perception of their decision-making [1] - While individual members are focused on their responsibilities, communication challenges arise due to external pressures [2] - Maintaining anchored long-run inflation expectations is critical for the committee's work [6] Inflation Concerns & Challenges - The Fed faces a significant challenge in keeping consumer inflation expectations anchored, especially given the difficulty in consistently achieving the 2% target [5] - Upside risks to inflation exist, and the committee emphasizes the importance of well-anchored long-run inflation expectations [6] - Consumer and business sentiments diverge regarding inflation expectations, creating uncertainty about future inflation [7] - Inflation is already above the Fed's target, and tariff effects further complicate disentangling the drivers of inflation [8] - The committee faces the challenge of keeping its credibility and inflation expectations anchored amidst uncertainty about the impact of tariffs [11] Tariffs & Economic Impact - Tariffs' impact on prices is viewed as potentially fleeting but the possibility of a persistent impact is not ruled out [9] - The discretionary implementation of tariffs by country makes it difficult to assess their impact on inflation [10] - Significant uncertainty exists regarding the economic outlook [12] Labor Market Dynamics - Tightening immigration policy impacts the labor market, potentially leading to higher labor costs for firms [13] - Wage impact and price effects are interconnected, influencing companies' decisions on cost pass-through and worker compensation [14] - The labor market is reacting to both supply and demand factors, contributing to the current unemployment rate [15] - Understanding the dynamics affecting both price inflation and labor rates is crucial for the Fed's decision-making [15]

when it comes to the history of my country Germany going back to 1948 and we are grateful to the United States that you gave us an independent central bank. This was the starting point for the famous German weds wonder. So central bank independence is key to achieve price to be really to build the basis for economic growth.So we we have to take this into account. Paul gave many important relevant speeches here in Jackson Hall and uh this year I guess for him it's a very important meeting. It's his last meet ...

Central Bank Independence & Monetary Policy - Central bank independence is crucial for price stability and economic growth [2][5] - The speaker emphasizes the need to fight for central bank independence, drawing on Germany's post-1948 experience [3][4][5] - The speaker expects Jerome Powell to deliver a clear message on price stability and the central bank's mandate [7] Interest Rate & Inflation - The speaker believes interest rates are currently in equilibrium at 2%, aligning with the target [8][9] - The speaker suggests inflation is potentially no longer the primary concern, but disinflation risks need monitoring [9][10] - Service inflation remains high, above 3%, necessitating a wait-and-see approach to monetary policy [10][11] Economic Outlook - A mild recession in Germany is possible this year, but economic growth is expected to return next year [7][8] - The speaker notes the potential for imported disinflation from a strengthening Euro and cheap Chinese goods [10] - The bar for cutting interest rates is high, requiring significant evidence to warrant a change in monetary policy [12]

Central Bank Influence & Independence - The report suggests a shift in focus towards central bank influence over its independence, driven by the appointment of a White House insider as Fed governor [1] Political Implications - The appointment indicates that the current administration prioritizes influence over the central bank [1]

Central Bank Independence - Central bank independence exists on a spectrum [1]

Central Bank Independence & Monetary Policy - The core debate revolves around the independence of the Federal Reserve and its monetary policies [1] - A historical belief supports an independent central bank to avoid politically motivated credit easing [1] - The aim is to defend the value of money and bond values [1] Economic Impact & Stakeholder Interests - Concerns exist about central banks potentially losing money through their activities [2] - These activities may hinder addressing debt and overall economic challenges [2] - Debt holders favor tight monetary policy for good returns, while those seeking economic stimulation prefer the opposite [3]